Chime’s IPO Is a ‘Money Printer’, But Not For All

This week, U.S. fintech company Chime Financial is set to log on to the Nasdaq, and further kicking off the resurgence of tech company IPOs.

The company will go public on Nasdaq on June 12, with an offering price range of $24-$26. It plans to issue 32 million shares and raise a maximum of $832 million, with a valuation of about $10.5 billion after full dilution, but still a distance away relative to the valuation of $25 billion in 2021 when Sequoia and others entered the market.The IPO was underwritten by Morgan Stanley, Goldman Sachs and others, with returns of 67x for early investors such as Crosslink Capital.

Company Description.

$Chime Financial, Inc.(CHYM)$ is a financial technology company founded in 2012 and headquartered in San Francisco, California.It is committed to providing consumers with convenient, low-cost financial solutions by offering no-fee mobile banking services through partner banks such as Stride Bank and The Bancorp Bank.As of March 2025, Chime had 8.6 million active users, up 23% year-over-year, with 67% of those users using Chime as their primary financial account.

Chime's services include:

• Early access to paychecks: users can receive paychecks up to two days in advance.

• No Overdraft Fees: Allows accounts to have a certain negative balance with no fees.

• High Yield Savings Account: Offers higher savings rates than traditional banks.

• Peer-to-peer payments: supports instant transfers between users.

• Interest-free secured credit cards: help users build their credit history.

Chime's business model relies on transaction fees from working with merchants, rather than account maintenance or overdraft fees from traditional banks.This model allows it to offer a free service to its users while maintaining profitability.

IPO Details

Chime Financial filed an S-1 registration statement with the Securities and Exchange Commission (SEC) on May 13, 2025, formally announcing plans for an initial public offering (IPO).

IPO Date June 12, 2025

Target valuation Up to $11.2 billion

Shares Issued 32 million Class A common shares (consisting of 25.9 million new shares issued and 6.1 million shares sold by existing shareholders)

Price range $24-$26

Capital Raising Target Approximately $800 million

Lead underwriters Morgan Stanley, Goldman Sachs, JPMorgan Chase

Chime's IPO is part of the 2025 fintech IPO boom, reflecting strong investor interest in technology and financial services companies Chime prepares for IPO. chime's IPO comes at a time when the fintech industry is recovering and the market is showing strong demand for companies that can demonstrate strong growth and profitability.

Financial Performance

Chime Financial achieved revenues of $518.7 million in the first quarter of 2025, up 32% year-over-year, with net income of $12.9 million .For the 12 months ended March 31, 2025, the company's total revenue reached $1.8 billion, demonstrating strong growth momentum.In addition, Chime has significantly narrowed its losses from $203 million in 2023 to $25 million in 2024 and achieved profitability in the first quarter of 2025.

Average revenue per active user grows from $231 in Q1 2024 to $251 in Q1 2025 with continued increase in user value

Financing and Shareholders

Since its inception in 2012, the company has completed several rounds of financing, raising a cumulative total of about $2.64 billion, with major investors including Sequoia Capital, Softbank Vision Fund, General Atlantic, DSTGeneral Atlantic, DST Global, Tiger Global Fund and other well-known organizations.Key financing nodes include:

1. August 2021 Series G: $750 million led by Sequoia at a $25 billion valuationpeak, followed by Softbank and Pan Atlantic;

2. September 2020 Series F: $534 million raised, valued at $14.5 billion, led by Tiger Global and Pan Atlantic;

3. 2019 Series E round: $700 million led by DST Global, valued at $5.8 billion.

Significant returns for early investors: $6.4 million invested by Crosslink Capital in 2014 Series A, valued at $430 million pre-IPO

Risks and Challenges

• Regulatory pressure: as a non-bank fintech company, Chime is subject to complex regulatory requirements. in 2021 and 2024, the company had settled with regulators over account closures and chargebacks, paying a total of $5.75 million in penalties.

• Competition in the market: Chime has to deal with competition from traditional banks like JPMorgan Chase (JPM)$ and emerging fintech companies like $Revolut and Monzo.

• Technology dependency: Chime's success depends on continued technological innovation, and it needs to remain at the forefront of artificial intelligence and data analytics.